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Coinbase investor Tom Loverro on why he sees a mass extinction


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Photo illustration: Tiffany Herring/Axios; Photo: courtesy IVP

IVP General Partner Tom Loverro has a sobering prediction: A “mass extinction” more severe than the 2008 financial crisis may be around the corner for early to mid-stage startups.

Why he matters: Loverro spends much of his time in the fintech world and is known for investments in companies such as Coinbase, IEX, NerdWallet and TaxBit.

Axios spoke with the investor Friday. This conversation was edited for clarity:

What makes you say a mass extinction is coming?

  • There was a lot of capital in the system in 2021 — too much. A lot of marginal startups, ones without proven product-market fit, were funded.
  • There are also good startups that are doing well, but are in danger if they don’t play their cards right. They might be trying to over-optimize on valuation but get a bunch of nos from VCs. All of a sudden they have a month and a half of cash, and they’re in a death spiral. My advice to founders: Don’t focus on valuation; raise sooner, and be conservative with your cash.

So you’d prefer founders in your portfolio take down…

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